Arena Insights forumNovember 30, 2018

Clément Viaud – Asset Manager (Neoen Australia)

Key stakeholders

Hornsdale Power Reserve

Clément Viaud – Asset Manager (Neoen Australia)

30/11 – Arena Insights forum

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Project overview: key points

Key information:– 100MW/129MWh Li-Ion battery owned and operated

by Neoen

– Co-located with Neoen’s 316 MW Hornsdale Wind Farm

– Installed and maintained by Tesla

– 792 Tesla Powerpacks with 189 Tesla inverters,

33 transformers

– Less than 6 months from project inception to generator becoming

operational the 1st of December 2017.

Partly contracted with the South Australian

Government:– 70MW/10MWh are dedicated to providing services for the grid and SA

Government

– 30MW/119MWh can participate freely in the NEM (Australian Electricity

Market).

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Project overview: key stakeholders

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Project overview: operation

Main objectives:– Provide “grid stability” services

– Reduce risk of blackout

– Increase competition among electricity generators

– Put downward pressure on energy and FCAS prices

– Generate revenue.

Services provided by the battery:– Energy (arbitrage)

– FCAS regulation (Lower and Raise REG)

– FCAS contingency (6sec, 60sec and 5min services)

– Participation in SIPS

.

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Services provided: Energy (arbitrage)

Principles of the arbitrage:– Objective of generating revenue by trading energy

– Strategy based upon a basic principle: the battery

imports low price energy and export it back to the grid

when the prices are high.

Market operation:– 119MWh of storage capacity and an output +30MW

(generation) / -40MW (load) are available for trading

– Bidding mostly automatized thanks to:

the bidding optimisation algorithms developed for the project;

bidding engine platform (custom made software) able to transmit

the bid to AEMO’s bidding platform (Market Management

System);

– 24/7 operations control centre in Neoen’s Canberra

Office (set up for the project) in charge of the

monitoring/supervision of the battery.

Example of a typical day of trading

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Services provided: FCAS Regulation (1/2)Principles of FCAS regulation:

– Frequency Control Ancillary Services are necessary to keep grid frequency between 49.85 Hz and 50.15 Hz

– Regulation FCAS is required to continually correct the generation/demand balance in response to minor deviations in load or

generation

– When enabled the battery follows every 4 seconds a dispatch signal from AEMO.

Performances:– HPR is the first FCAS regulation provider using another technology than conventional synchronous generation

– Compared to conventional generators, the battery’s response is both quicker and more precise:

Accuracy and speed of regulation FCAS

response – large conventional steam turbine

Accuracy and speed of regulation FCAS

response – Hornsdale Power Reserve

Graphs source: AEMO (Initial operation of the HPR – April 2018

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Services provided: FCAS Regulation (2/2)Impact of HPR on the SA Raise Regulation Market:

HPR operational

Under normal conditions– Prior HPR, the regulation prices were ~35$/MW-h

– Since HPR is operational, prices are ~25$/MW-h, 30%

lower than prior Dec. 2017

During SA 35 MW FCAS events– Under certain conditions, the market operator calls for

35 MW of FCAS Regulation to be sourced from within

SA

– Such events lead to high prices (~20 to 50 times the

normal average) as a consequence of a very limited

number of FCAS providers in SA.

– The battery is now providing competition and reduces

prices.

– As an example: on 14 January (first 35MW event for

HPR), the battery set the price reducing it by ~95%

Compared with the previous year SA Regulation

costs declined by $40m. On January 14th savings for

SA energy users were $3M in a single day (5 hours)

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Services provided: FCAS Contingency (1/2)Principles of FCAS contingency:

– Frequency Control Ancillary Services are necessary to keep grid frequency between 49.85 Hz and 50.15 Hz

– Contingency FCAS is required to correct the generation/demand balance following a major contingency event, such as the loss of

a generating unit or major industrial load, or a large transmission element.

Graphs source: Renew Economy

Performances - Loy Yang event, 14 December 2017

On 14 December, Loy Yang (in Victoria) tripped resulting in 560 MW loss

of generation.

– The minimum frequency observed during this event was 49.77 Hz

in the Mainland and 49.40 Hz in Tasmania

– First major event after the battery came online

– The response time for the battery was a matter of milliseconds

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Services provided: FCAS Contingency (2/2)Performances – QLD SA System separation, 15 August 2018

On the 25/08, the NSW-QLD interconnector tripped due to a lightning strike, causing significant instability in the entire grid. The

sudden drop in frequency, combined with change in power flow on the VIC-SA interconnector, led to the separation of SA from VIC

around 8 seconds later.

– Prior the event the battery was charging at -

40MW

– As a response to the drop of frequency, the

battery jumped straight up to +47MW,

providing an equivalent of +87MW of

generation

– Then to absorb the following frequency

hopping, the battery went straight to -62MW

providing a response equivalent to 109MW of

drop of generation

– This event caused the load shedding of 724 MW in NSW

280 MW in VIC

But 0MW in SA most likely thanks to the HPR.

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Services provided: SIPS (end of 2018)

The battery will be part of the following

scheme to be used as :

– an additional link in the existing logic

chain (the battery would be the

primary response to an event on

Heywood);

– a buffer before triggering regular

“load-shedding”.

Following the SA Black-out (Sept 16) AEMO suggested to develop with ENet a Special Integrated Protection Scheme

(SIPS) that would detect sudden excessive flows on the Heywood interconnection (ensuring the SA-VIC connection) and,

initiate, if necessary:

– Emergency load shedding or

– Quick additional generation

SIPS logic scheme

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Conclusion

Ability to participate in

all FCAS services

HPR can provide a range of

valuable power system

services, including rapid,

accurate frequency response

and control.

Significant impact on

the market

HPR ability to trade energy

and the addition of new

FCAS capacities in a SA

market relatively limited in

term of number of actors

have contributed significantly

to the lowering of energy and

FCAS prices.

Part of the New System

security services

Once fully integrated in the

SIPS scheme, HPR can

provide a valuable new layer of

security to avoid SA islanding.

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